Using cryptocurrencies for real estate transactions
In the absence of specific regulations from country to country, you cannot carry out a sale paid directly with digital assets and it remains to perform real estate purchases using cryptocurrencies as a notarized asset exchange. This translates as assets exchange, not acquisitions due to lack of regulation. I have a digital asset, someone else has a real estate asset, and the two owners exchange assets, this is because digital currencies are not equivalent to fiat currencies, to traditional money, and thus are not being regulated.
In such a legislative context, the assets - real estate and cryptocurrencies - exchange needs a third party like a notary to intervene and write down the transfer of property of one asset to the other and also its history of it through the use of digital wallets from both sides. Let's imagine that you have a house or an apartment and it is worth 10 BTC. By marketing the asset with this requested value a buyer agrees on the price of the property at 10 BTC and the exchange of assets is done at the notary. He legally evaluates the ownership of the property and starts the procedure to transfer the assets both ways. The notary draws up an exchange contract, at which point the buyer of the real estate asset transfers the digital assets to the seller. Once this is completed and confirmed by the notary, the transaction completes and the asset exchange is classified as closed.
Basically, I transfer the property digitally, the 10 BTC, and receive the real estate in return. We sign the exchange contract and each become the owner of the other's asset. I become the owner of the property, you become the owner of the 10 BTC, and the transfer can be made instantly from the phone, from one digital wallet to the other digital wallet. With the signing of the exchange contract, I become the tabular owner of the building and that's it.
This is one alternative that is implemented in my country, Romania. Due to missing clear regulations on crypto, the real estate purchase with crypto takes the form of asset transference from one owner to the other. Only when one of the assets is exchanged for fiat do they become taxable and you need to pay for that. But until that happens, you simply exchange the ownership of the assets. I wonder how this process is conducted in your country and if there is any better model for it.
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Real Estate and cryptocurrency will end up merging. There is a lot of use case for tokenization when it comes to that sector. With an estimated $325 trillion globally, it is a huge market.
The challenge is the archaic nature of the industry. Real estate is still operating, in many way, like it did 100 years ago. That has to change.
Could cryptocurrency be the solution? We will see.
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I was supposed to be working on an NFT real estate project in Africa, but they have seemed to have vanished. But I love the idea of putting real estate on the blockchain and is something that has interested me since I got into crypto. The US just makes it hard to do anything.
When you think about all of the fees and other paperwork junk from the bank a crypto transaction for real estate sounds smarter and smarter.
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That sounds like a nice idea but doesn't the paperwork still have to happen at the government level? There also isn't any type of enforceable contract either right?
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